tv Bloomberg West Bloomberg February 15, 2014 4:00am-5:01am EST
>> from pier 3 in san francisco, welcome to "bloomberg west" where we cover the global technology and media companies that are reshaping our world. i'm emily chang. every weekend we'll bring you the "best of west," the top interviews with the power players in global technology and media companies that are reshaping our world. well, this week, the two biggest cable operators in the country decided to join forces in a deal analysts say is shocking. comcast swooped in agreeing to uy time warner cable for $45.2 billion. both have approved the deal but they face lengthy regulatory
scrutiny. it potentially ends a battle by charter communications, to take over t.w.c. i spoke with jon erlichman, chief washington correspondent peter cook, alex sherman about the deal and started by asking on how it all came together. >> charter had this great interest in doing this deal with time warner cable. time warner cable wanted them to pay more money. they worrying about the possibility of comcast acquiring some of the assets of time warner cable and along the lines they decided comcast, it's a better move to get bigger than everybody else and have control over marks like new york and los angeles and chicago, philadelphia, the d.c. area. they truly are the biggest player in the cable business in
the united states. >> right. but is this deal going to go through? the regulators made it clear with at&t and t-mobile they wanted four wireless carriers. is it going to be any different with cable companies? >> it is because they are different businesses. yes, the government is going to scrutinize this carefully. you get number one and number two joining together, that raises a lot of flags here in d.c. because there is that full spectrum of competition from the satellite providers and google and the things over the internet, a lot of folks i'm talking to say this is going to be looked at a little differently. but at the same time they are going v ask a lot of comcast. they are going to ask them to divest subscribers that would put them over the 30 million mark. they are going to ask them to do a range of things with regard to net neutrality. this is going to be a difficult process and it's not a done
deal by any means. comcast making the case in favor of this from the competitive standpoint but there are folks in washington who think this will be l get done although the conditions may be very painful for comcast. >> we spoke with the former resident of cnn. i want you to take a listen to what they have to say about this deal. >> these companies have to get as big as possible as fast as possible in order to keep their programming cost down, in order to create even more economies of scale and marketing back office systems, all of that stuff. >> alex, i want to bring you into this. we've talked to apple talking to time warner cable about a new deal for apple tv. what does this mean for innovation in the cable industry? does that slow this down? >> there is argument it could speed it up because comcast technology is superior to time warner cable. you make them bigger and give them more resources and bigger scale, you can get more customers on the same page as
r as expediting the way that people watch television. comcast has guide the "x" 1 and x 2 they are called. they are state of the art individual crow guide. they look like netflix or amazon prime than your cable grid you are used to. you add on a lot more customers to that and it's possible that many more people can have a more advanced television viewing experience than they can today. >> however, i want you to take a listen to another thing that jonathan kline had to say about how monopolies impact innovation. take a listen. >> the downfall of monopolys is that they take their audience for granted and that is an enormous opportunity for new comers to come in. time warner loves to say don't leave us we have this cool new apple thing coming down the road. the problem is apple doesn't ave content relationships.
>> jon, what does this all mean for apple? >> i found myself thinking today about walter isaacson's book on steve jobs and the comment where steve wasn't that big on paying for cable, decided i'm going to sign up for comcast. and then after signing up, he called the c.e.o. of comcast and roberts said steve told me it sucks. that's a reminder that comcast does have some cool technology and brian roberts does think about putting out a more innovative service. but most of us view the cable companies as slow and trying to squeeze us for money and have been hoping there might be some new great type of tv watching experience that is more like the experience you have on your phone. i think that's why a lot of people have been pointing to apple. as bloomberg has reported in apple's talks with time warner
cable, the challenge apple faces is breaking up that cable ecosystem, being able to sign competitively priced deals with all the content players that are similar to the ones that the cable companies already have. now jon, you also did a big interview with disney c.e.o. bob iger. disney owns nbc, i want to talk about the content perspective. first take a listen to what iger had to tell you in that interview. >> whether this consolidation or ownership of the existing multichannel business changes, we're going to be as in demand as we've been. you can't go after the multichannel subscriber without offering them our product so it doesn't really mean much to us. > given comcast also owns nbc, peter, that adds another wrinkle into this whole potential deal. how does that play into
this? >> it's a big factor. they are not a straight cable player. they are a content provider as well. it's an important wrinkle and it's one of the factors that will make regulators look at this differently and why the stakes matter more than cable bar. one thing very important to remember is the consent decree they signed with the government when they took on nbc, they agreed to do certain things in that deal, things to promote more competition in terms of programming and expect they are going to have to follow that same roadmap in this deal. perhaps they might have to exceed that to win regulators approval. does it become too painful so it becomes less attractive to them. right now they are making the case that it is competitive. they have committed to do some of those things but not all of them. >> alex, what do you think?
how does this actually all play out? >> one important thing to look at is there is no breakup fee in this deal. you could interpret that several ways. one, you could say that's confidence on both sides something can get done. if regulators did step in and block this, neither side would be paying anything. in a way it also blocks out charter. because i think charter would have seen the breakup fee and said ok if time warner cable has to pay comcast, maybe we can make a case to shareholders we're the better option. without the breakup fee it's going to be very difficult for charter to get in here. they can't pay $160 a share. they haven't up to this point. it's better than a 50/50 chance at this point that comcast will proceed and divest some subscribers and move forward with the deal. >> my partner, jon erlichman,
>> welcome back to the best of "bloomberg west." i'm emily chang. on wednesday, the obama administration released new cybersecurity guidelines designed to get banks, utilities and other essential services to improve their defenses against hackers. they outlined basic voluntary standards they can use, but this framework doesn't include financial incentives to help companies improve their defenses. cory johnson and i spoke with phil mattingly and ken benson, president and c.e.o. to have securities industry in the financial markets association from new york. we began by asking phil, would this be a game change?
>> this is a nice start but it is not anything that is really going to change the game, at least as it currently stands. it is a group of best practices, also a place where people with communicate and find best twoy counter these cyberattacks. missing from this release, incentives to get big companies like the banks that are members of ken's organization to want to come in and participate. they have to pay for infrastructure. they have to be careful about sharing information. none of that is addressed here. until that is, it is going to be difficult for companies to jump all in. >> ken, what is your take on this plan? what kind of incentives are you looking for? >> i think i would be more robust than fill, not to continue district him. we think -- contradict him. there is more that needs to be done including acts that congress needs to take. we have to remember that the
industry has spent a tremendous amount of a money in developing systems and protections. there is more to be done. we're only as strong as our weakest link. these standards will begin to spur, not just looking at the financial sector, but across all commercial sectors where we think there is more work that has to be done there. we believe this is a positive development. >> the least amount of successful hacking against it. what does the financial industry understand that places like, you name it whether whether it is target, yahoo! or twitter, they have all had issues with hacking. >> we look at it from a markets perspective. there are so many ways to come into the system that again, you're only as strong as your weakest link. what has happened in the case of target and neiman marcus that there are risks.
that is why we think this needs to be a top priority for the administration, for the congress. it is a top priority for our members and our organization. >> so here is my question. is it really the responsibility to have government, the federal government, to give a company like target incentives to make their network more secure? shouldn't they as a company make that a priority? >> you would think. other companies look at what happened to target and neiman market as well over the holidays, they have plenty of incentives right now but maybe they might need some guidance from the white house. >> how are companies like target different from utilities and financial sferses companies? >> it is an interesting question, emily. i think in the grand scheme of things, at least how the administration views it right now, they are very similar. ken's point, a key point you hear from administration if i recalls, as long as there is a weak link there are major problems. what happened over the last
couple of weeks is a major problem and maybe a leading indicator. perhaps if people like -- members of congress, if they can't find some type of legislative fix, a key component that is not addressed, these problems are going to continue to snowball. what you see with target and neiman marcus, people are pointing to them and saying we have a weak link here. as long as they exist, we have major problems system-wide. >> ken, you have actually run experiments where you're testing out a nightmare scenario. you call it quan tom -- 2. scenario? >> they are working with our regulators, with the government, with the treasury department across the financial services industry. we looked at what a cyberattack on the equity markets would look
like even to the point y you have to close down the markets. it is not so much about incentives. it is about the need for better coordination between the industry and our regulators. the need for better information sharing between industry participants, market participants, between market participants and the government and the government and the markets as well. some of that is where congress can come in and provide liability protection. when the industry sharing information or shareing with the government they don't trip other regulatory rules that are out there. >> white house correspondent phil mattingly as well as ken bentson, president and c.e.o.. coming up, more people watched the walking dead's premiere than the sochi olympic game on sunday. we talk about the hit show next.
>> welcome back to the best of "bloomberg west." i'm emily chang. amc's hit show about zombies, "the walking dead," faced tough opposition from the winter olympics this week. but in its fourth season debut, it beat out the olympic games. our west coast correspondent jon erlichman spoke about the program's success with the c.e.o. of amc. >> you mentioned in your description it is a zombie show but i think it resonated more broad by because of some of the hemes that have to do with the zombies than they do relative drama. would you stay or go? would you lead or follow? would you hunker down?
see if your family returns or go out and look for them? it is quite relateable. >> people like to talk about it. what i find equally impressive, you guys have a show called "the talking dead" which airs at "the walking dead" where you talk about the episodes. i believe on sunday night you got close to 6 million viewers. that is the kind of number that most people in cable would crave to get. does that speak to the nature of this show? >> >> there is something about live event television despite much press, alive and well. you look it a for what the water cooler aspects are "the talking dead" which really is a promotional program, it brings together all the sentiment about that live event. sure. i think the beauty of that is it is a show that serves fan boys well.
we saw so many of them speaking on line we thouth we would bring he television to the conversation. >> in order words, netflix can have success with their original strategy and saying, here are all the episodes at once. you guys stretch it out, one here, one there, and then talk about it. and both models can work? >> i think there is something to anticipation. i still believe that if you look at "the walking dead" and "the talking dead," it is a week of being a part of something. then you look forward to the next one. obviously, there are many great ways to catch up on "the walking dead" after the live event. it starts literally the next day. we have so many partners who watch on demand. with electronic sell through and all the other opportunities right through to the binge. we ran against the super bowl. we had a marathon of "the walking dead." that did very well also. there are all sorts of ways --
we talk about it as an ecosystem. there are all sorts of ways to nurture the ecosystem. i used them all to build anticipation for the live event. >> one of the differences between this show and others that you have, is you guys are the studio partners behind the show. that makes me wonder, what is the longevity of this show? you guys are talking that having a companion series down the road. what can you tell us about that? >> we look at the show. there is a ton of stories to tell. there is a lot more character. you saw it in the backstory about michonne this week. the greater appeal these characters could go on for a long time. i have a partner who says that we think the zombie apocalypse could go on forever. i do not know about forever, but there is a lot of stories tell and a lot of character to develop.
we are starting with robert kirkman who created the comic book. it is well past its 100th edition. it is about the relatability of the human condition. obviously those stories can go on literally forever. >> a long time. beyond that, before we go, beyond zombies, that are your next big shows? you have a few coming. "the turn" is a revolutionary war drama. do you get butterflies in your stomach when you guys have set the bar so high with some of your other programs? >> i heard you mention your hildren. i have four. i love all my children equally and differently. the difference with "mad men," hell on wheels," and other shows is that we are moving to other stories. it is natural to create that. it is as strong as anything we have done. i cannot wait to share it with
the world. >> jon erlichman with the president of amc. another top story this week, apple is set to introduce another tv set as soon as april. they are also in negotiations with time warner cable and other potential partners to add video content. i spoke with bloomberg's peter burrows. >> we're hearing it could be announced around april and ready in time for christmas. you're right. we're hearing talk of a new interface that would make it easier to use for people, but also the content i think is going to be key. >> would this be vastly different from the apple tv that we already know? >> we don't know. it is not apple's -- they don't often come without something radically different on itunes. it is probably -- again, content is really what they have been missing. it is still a hobby relative to
the size of apple. they have referred to it as a hobbiesque product. if they can get it, so they have all time warner cable content on there, suddenly it is a place where it can become kind of a primary viewing vehicle for people rather than just for netflix or just for a few of the different channels they have on there now. >> we're hearing it is going to proprocesser and will be easier to use. the pressure has been on apple to come out with something new. it doesn't sound like this is really it. >> neen the tv world, we have been hearing talks for years that they are going to come out with an actual tv. that is not what this is. they have a lot of big projects in the works. they are currently working on iwatch. we have been hearing talks. they have been hiring sleep experts and fitness experts.
we'll see whether this is an evolutionary improvement of a fairly minor product for them or whether this is when they really start to craft the living room in a big way. >> what are we hearing about a real television set? people have been saying this is coming out any day now. >> they have been saying that for three years. who knows? i'm clearly -- apple has the wherewithal and talent to look at a lot of things. i'm sure there are people working on a television somewhere inside apple, but there is lots of questions. it seems like sometimes the street wants margins. sometimes the street wants growth. clearly a tv would cause a margin problem for them. a profit problem. >> bloomberg's peter burrows talking about apple. we'll be watching to see how a comcast/time warner deal would
bloomberg west, i am emily chang. to the future of american cities look like the jetsons? according to an intel study, 44% of people aspire to live in a driverless city. orie johnson and i spoke to steve brown. >> we asked people about the world they want to see. for four percent are interested -- a 44% registered in a driverless city. they want a city environment they can hop into a car and it takes them to a destination with
no human behind the wheel. i doubt it will happen in the next 10 years. of the compelling view future. there is less congestion. self driving cars tend to be safe there -- safer. >> the number of people in america who are not young people who are not getting it drivers licenses. a that about the notion that sharing economy? is there a shift in the wind people look at the desire to drive a car? older havey age and been sold the american dream of a car being a symbol of freedom. if you are a millenial, you arm less likely to see it that way. you have to pay insurance and taxes. resource, cars spend 22 or 23 hours a day doing
nothing. bolan deals are more -- millenial's are more disposed to sharing cars. happening only in cities? what are the trends in the suburbs? -- where focused about we live, the rest of the country still needs their cars? >> you will see more and more people coming to cities. that is the global trend. people will want to decide what kind of drive it what to drive. is it when they can drive themselves or one that will drive them there and take away the pressure of driving. anre is more pressure in urban environment. you know how miserable it can be to sit in traffic. it is not the dream the car companies sell you. in an urban environment, people will want this. in a rural environment people will still want to drive themselves. the preindustrial cities, san
, theisco, new york, boston postindustrial cities like phoenix and austin, they are growing like crazy. require automobiles in a different way. up,ities tend to grow cities in the u.s. tend to grow out. the era developed in after the motorcar. publicy be a way to have hesitation but in the form of a self driving car. from the research we have done at intel, people are interested in that model and they're open to the idea. they are open to the idea of cars that talk to each other and share information about what might be a hazard ahead.
ways soey can part the that cars can move out of the way so am... can get through. they would like to have instrumentation and tractors in the car to help with that. >> we have talked about that technology preventing car accidents. you also talked to people in the survey about drones. what is public opinion about drones? are they scared of them? >> the surprise to me. we have all heard about death machines in the sky. people are anxious about that. aret 60% of people enthusiastic about drones for public service. again helped firefighters go into a building and inspect a building and checked the air for
chemicals. they can understand where people might need help. if an amulet cannot get across town, a drone can take a oribrillator machine medication that helps to stabilize the patient before nablus could get there. >> intel futurist steve brown. panoramic photos can be beautiful. coming up, we will look at an app that takes hands-free panoramas on your smart phone. ♪
the keycial media hold to making mobile payments more secure? i spoke with paypal vice president who recently joined pay.oard of what we i began by asking why? >> i am passionate about innovation. innovation comes from the small guy. if you think of square, paypal. even the early days of the web. innovation in payments on the internet come from small guys. they push the limits. we pay is looking around the corner. they're looking at the next part of e-commerce. >> they basically use facebook to authorize payments. that sounds interesting. i wonder if you have a hard time
convincing customers that this is the best way to verify if someone isn't fraudulent. >> we are not just facing -- focusing on facebook. payment has been about risk and technology. sauces usually the secret , even when you go back to when the set started. it was a technology company. building great risk systems for today's problems has always been a recipe that works eared paypal did it. using social signals just makes sense. you can look at your facebook profile and tell a lot more about you than where a transaction happened. >> you made a huge pivot and dropped the consumer product. how do we know that they are on the right track as tock? >> for 15 years, e-commerce has
been about products. corner of your house and search online and buy a product and get it shipped to you. price and selection was really good online. as mobile put the internet services are, being created more efficiently. b&b.ave google and air it brings buyers and sellers together. >> this is a very crowded space. you actually said over a year is delivering any solution that will get scale, even me. specificallyking about card swiping. that is a long-term thing. >> this is about changing card swiping? >> how do you update to
something better? it is going to take time. in terms of the marketplaces that are reinventing services, think about how you find a babysitter or the way you do your laundry. all of these are services that are coming about in a new environment where consumers are creators of services. fundraising is, another big one. that marketplace has a new set of payment and risk problems that we think we can solve. >> we are seeing companies like run into big problems. we are behind it. we are still using swipe cards. is we pay going to hit those same international problems? >> we are focused on online marketplaces. they are not going to swipe your card. that is the primary focus. there is room to grow.
involved, it is focused around the experience of the payment as an afterthought. whether it is payments or pictures, you use your phone for almost everything these days. canw app called cyclomatic take smartphone photography to another level. the app allows the phone to spin itself around in a circle to take a panoramic photo. up on the rankings. ceo of theth the company that launched the sap. he began with a demo. >> you set the phone you press start. will do a 180. >> how does it turn like that? >> it is the vibrator in the
phone. at the end it just puts all the shots together. we do it at 40 megapixels, which is really high. >> halloween working on this? -- how long have you been working on this? >> about a year. hands-free is just for the iphone of five s. we have a full-blown suite. >> is this done? can you show us? turn it so the camera can see it. wild.t is i want to understand the
programming. the vibration think, what is the science behind that? i nokia phone was moving. thatted to do a nap -- app was not meant to be used for that purpose. i thought about making the phone move. i did some tests and i wrote an app or i could change the vibration on different surfaces. as soon as i was able to do a 360, i thought it would be fun. >> you have been in your company. >> we are working on other apps. called --st one lfie 360.one called se is it working with the
app store and get it approved? bewe were afraid it would difficult. when lee submitted, it was the day before christmas. they're closed for christmas. we get rejected first. i had to do a video to prove it. you cannot sell magic. i did a video and the video went viral. views in a few days. that really launched the app. >> we should mention that the byk of the phone was signed somebody. yahoo! is working on a partnership with yelp we will discuss that next on bloomberg west. ♪
partnering with yelp on a search deal. be integrating reviews into its search results. it is similar to one that yelp has with microsoft and apple. how it impacts the companies, cory johnson and i spoke with brian blair. >> i think it is going to be similar what we see when we we will see yelp listings at the top. it yelp is a strong brand. it is going to bring an added degree of intelligence to yahoo! search. it will drive people to use yahoo! search because it makes it smarter. >> one of the interesting things social. is make it more yahoo! is never really had success with that. >> one of the things it is
interesting as it was a apple do this 18 months ago with their mobile map tronic on ios. this order to build an yelp reviews. if you are searching for a variety of services, if that service had been reviewed, you saw two or three reviews. it was great for apple because it added a lot of intelligence to just searching for any kind of business. it was fantastic for yelp as we saw reflected in the stock price. it drew a lot of new users to yelp, which now has 53 million new users a month. that is substantial. beenw has yelp's business helped? how has that impacted them? .> there was concern early on there were concerns that this
would impact yelp's business. onis that had any impact their business. that is largely because so much of the growth that they have seen has come from the mobile side and the last 18 months. apple's mape into system has grown the brand and made them a from earlier name. they have entered a lot of international markets. there has been no impact. this is going to further push brand.p rand -- this is a substantial opportunity for yelp. a partnership microsoft, why is this necessary? .> able to use bing
it has gotten bigger as a search platform, but yahoo! is still the mammoth. there are 800 million users. 350 million of those are mobile. until we see the products, we do not know the impact. my feeling is we will see this as a push into mobile where it yelp has been strong and where yahoo! hopes to grow. we will see this high in nicely with the mobile environment which will be great for both companies. >> that was brian blair. cut up, cory takes a trip on the vomit comet. it is pretty cool. are giving virgin galactic travelers a trial run. ♪
you may need to propel yourself or weightlessness before the trip. that is where zero g corporation comes in. they are partnering with richard branson. cory johnson traveled to cape canaveral. >> i'm cory johnson. right now, this is one of the most enjoyable moments of my life. it was not always that way. a few minutes ago, i looked like this. canaveral and experiencing zero gravity. i am exactly the wrong person to be doing this. has partnered with virgin galactic. they're getting acclimated to the experience of weightlessness. they are offering the
experienced anybody will pony up $5,000 for the experience. flies to 24,000 feet and goes into a series of arcs. angles andt extreme it feels like 1.8 g's. it dives foreet, 30 seconds. passengers experience weightlessness. they do it again and again and again. there is a reason why this plane is known as the vomit comet. >> it is very rare for people to get six. someam going to need handling. >> these companies are serving to talk about training. they're bringing customers on board to experience microgravity. it is a wide open market being
created. >> that brings us to where we all started. >> this experience comes at a price. ticket costsctic $250,000. $5,000 for sixng minutes of weightlessness. they have their eye on more than just space travel. there's is big money looming from nasa. the space agency is increasingly outsourced. >> it is all going to be private companies now. >> and, liftoff. space maker says it
will charge $90,000 for sore -- sub orbital flights. amazon ceo jeff bezos is in the testing phase of his company blue origin. he wants to take three astronauts and a capsule. we are back on the ground. paying $5,000 may seem like a lot of money, but they can be extra perks. you get to keep the flight suit. and you get the 20 pictures to make you the envy of your friends. can you put a price tag on that? small step for me, one giant leap for bloomberg television. >> better him than me. that is our editor at large cory johnson. fun. having way too much that does it for us. you can watch us monday through friday at 1:00 p.m. on the east coast.